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Construction Material Prices Still Climbing
Demand Continues to Be Strong

Construction Material Prices Still Climbing

In spite of the recent decline in oil prices, the Associated Builders and Contractors is calling for continued increases in material prices.


To the surprise of few, the costs to purchase materials used in all construction ticked up in October, putting them at 7.9 percent higher than this time last year. Also being reported by the Associated Builders and Contractors analysis of Bureau of Labor Statistics Producer Price Index data is that nonresidential construction inputs are up over 8 percent year-over-year.

In the individual categories, crude petroleum prices are 49.7 percent greater than last October, although the current decreases should bring that number down in the next report. Steel mill products cost 18.2 percent more, and iron/steel products are 13.9 percent higher - the largest year-over-year increases besides crude.

On the plus side, softwood lumber is down 7.9 percent, and natural gas saw a yearly decrease of 2.9 percent.

"While there is anecdotal evidence suggesting that higher materials prices have stalled certain construction projects... for the most part demand for construction services has continued to ramp higher," said ABC chief economist Anirban Basu citing the record levels of his organization's Construction Backlog Indicator and the strong Architecture Billings Index. "Accordingly, there is little reason to expect a dip in demand for construction materials during the months ahead."



Filed Under: ECONOMICS, CONSTRUCTION
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December 11, 2018, 10:09 pm PST

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